Nation Media Group has reported a 15% drop in half year after tax profits to Ksh 785.4 million compared to Ksh 925.2 million reported in the same period last year. The drop was largely as a result of a 7.8% drop in group turnover to KSh 5.6 billion despite the management blaming government’s failure to pay bills on time.
Profit before tax stood at Ksh 1.15 Billion, representing a 20% drop from the Ksh 1.43 Billion posted in the same period in 2015. Delayed payments increased by a small margin of Ksh 23.5 Million to Ksh 163.6 Million versus Ksh 140 Million posted in June 2015. The Nairobi listed company said that government owned entities accounted for a significant part of this bad debts.
Total costs dropped 4.1 per cent to Sh4.4 billion in the period under review as the management said these were “fruits of the efficiencies of the new printing press” coupled with prudent cost management strategies.
Print revenue, which contributes to over 80% of the group’s revenue fell by 9%. On the other hand, Kenyan television revenues increased by 26% while Ugandan TV revenues were down 27% with a 93% drop in operating income. Earnings from the group’s digital business grew by 90% though this accounts for less than 5% of its total revenues. However, the company says they plan to grow the digital division’s contribution to total earnings to 10% within the next three years.
“Our strategic objective is to foster a strong digital foundation coupled by new revenue streams for a sustainable and profitable future, new age consumers are not consuming our products in the traditional way.” said the company’s CEO Mr Muganda.
NMG earnings per share fell by 15.6% to KSh 4.20. Despite the drop in earnings, the board retained an interim dividend payment of Ksh 2.50 per share.